Knowing Victory and Defeat

By Growthink

Created 07/09/2012 - 17:49

The founders of wildly successful companies - with their world-changing impacts and their awe inspiring wealth creation - receive much well earned praise and financial rewards for turning their great entrepreneurial visions into reality.

But what about those with 1-2 degrees of separation who also benefit immensely?

Folks like Andy Bechtolsheim - who invested $100,000 into Google in September 1998, a position now worth more than $1.7 billion.

Or a Mark Cuban, who rode the Internet wave perfectly, to the tune of selling Broadcast.com to Yahoo for $5.9 billion in Yahoo stock. Even better, he had the additional good luck to sell nearly all of that stock near the peak of the Internet bubble.

For that matter, how about Mikhail Prokhorov, now with a fortune estimated at over $18 billion, and other rags to riches stories like his driven by having the right friends at the right time?

Prokhorov as a young man had as his sponsor Deputy Prime Minister of Russia Vladimir Potanin - just as many of Russia’s largest state-owned enterprises were being privatized.

Prokhorov parlayed this relationship into a controlling interest in the huge Russian nickel business before it became a stand-alone publicly traded company.

And he - like Mark Cuban - had the additional boon of turning his equity stake into cash at the absolute right moment (and the circumstances of which are high comedy[1] to say the least).

These stories of great luck and fortune are timelessly inspirational for entrepreneurs, investors, and dreamers everywhere.

At the same time, they are frustratingly vexing and opaque to turn from descriptive narrative into prescriptive guide.

I.E. – if it were only so simple doing “A,” and then having “B” magically appear.

But of course luck and good fortune - as a whole lot of business philosophers from Nassim Taleb to Malcolm Gladwell to Joshua Ramo have opined - just doesn’t work that way.

There is, however, a LOT that we all can and must do to “let luck in.” Author and speaker Stephen Shapiro [2]offers three great ideas to do so:

1. Grasp the Critical Difference Between the Probability of ANY Good Thing, versus a SPECIFIC good thing, Happening. To illustrate, Shapiro puts a twist on the famous birthday example:

“…if you ask the question, “How many people do you need in a room to have a 50 percent chance that two people will have the same birthday?” Some people immediately assume it is half of 367, or roughly 184. While that is a logical guess, it is actually incorrect. In fact, you would only need 23 people. Shocking? Try it some time and see what happens. With just 40 people you will have a nearly 90 percent chance that two individuals will have the same birthday.

Now I’d like you to consider how many people you would need in a room to have a 50 percent chance that two people share a particular birthday? For example, I was born on April 25. How many people would I need to have in a room to have a 50 percent chance that there is another person with my exact birthday? Surprisingly, the number now increases to over 600.”

The business point?

While specific goals and objectives are great, be careful to not limit the various permutations that a business journey might take to arrive at a desirous destination.

2. Understand the Difference between The Value of Planning, and being Wed to “A Plan.” Shapiro quotes General and Future President Dwight Eisenhower’s poignant quote that "In preparing for battle I have always found that plans are useless, but planning is indispensable."

3. The Great Ones Above All Else, Act. All of the stories of business success are many things, but above all else they are tales of ACTION.

Of writing the code. Of making the investment. Of going to the conference. Of talking to that beautiful stranger.

Now thinking and being like this does not guarantee that you will become a famous General, or a wildly successful entrepreneur or investor.

But the opposite is assured - that without cultivating the mindsets of boldness, of action, of positive expectation, one runs the serious risk of living - as a man of famous great action once so famously said - “with those cold and timid souls who know neither victory nor defeat.”